stuart: so you do every year? >> yes. stuart: you are sucked into this medical world? >> yes. i am sucked into the world of not wanting to be hospitalized. stuart: re: digress. what a pleasure it was to have you with us. dagen and connell, it is yours. dagen: you may want to start worrying about the flu shot. connell: thank you, stuart. dagen: i am dagen mcdowell. connell: i am connell mcshane. what the fed does today will speak volumes about whether or not we are going over the fiscal cliff. dagen: and overhaul of corporate taxes. that is on the table.

connell: well other states now fall after michigan. dagen: the president of stubhub is here to talk all about it. connell: first, let's get to the floor of the new york stock exchange. nicole: $1.2 billion share repurchase. they are buying back shares from the estate of a longtime shareholder. here is a look at stocks this morning. very busy. it was halted for news. there is the stock right now. almost $134,000 a share. of almost 2.5%.

let's take a look at the broader market average. the dow is up five days in a row. traders say that the trend continues to the upside. the dollar is lower. back to you. connell: you mentioned bad day. first, the latest from capital hill. they say we are over the fiscal cliff, unless tax rates go up. the sign will come from the fed. we will know in the next 90 minutes. former atlanta fed joins us now. how is the decision connected, do you think, to the fiscal cliff? >> it has to do with balancing risks. they do not want to risk the

recovery that we have underway already, even though it is slow. i expect two things. first, they will not change policy. they will continue quantitative easing. they will probably stop operation twist. simply because they do not have anyone short-term securities of any significance to sell. they will continue the asset buying programs as a hedge against going over the cliff. connell: all these names that we have become familiar with, you mentioned operation twist and quantitative easing, one, two, three, the speculation about four. basically, easy on it. policy. you are telling us, and a lot of people expect, they are worried about what the fiscal people are doing or not doing.

>> they do not have to with interest rates so low. >> well, that is the trade-off. a lot of people think that they should stop. in fact, some people that they have gone too far. connell: what do you think? >> i think that the risks on the exit side are so great that i would have paused before. i would have argued that to continue down this road. simply because i believe there are probably diminishing returns. the recovery is underway. it is not needed.

connell: sometimes the expression, "you are in too deep." >> i would cut my losses and stop now. they are in too deep and it has to do with the exit strategy. there are a lot of people sitting on lowe yielded bonds. that means a huge increase in interest rates. that is what bothers me. connell: i do not think that will happen. we will see. robert, as always, thank you very much. dagen: a new development in the fiscal cliff talks. it could include an overhaul of the corporate tax code. with reaction, let's bring in congresswoman loretta sanchez.

she is from the beautiful state of california. congresswoman, good to see you. are you on board with this? >> well, i will have to see the moving pieces before i make a decision on things. certainly, i always thought that if we could, we would put in corporate tax rates, not individual rates. we will see. we will see if the president and speaker boehner can come up with a deal. and, secondly, if speaker boehner has enough votes to have enough people vote for it. dagen: we have heard from senator harry reid once again. if the democrats do not get the tax increase on wealthy americans that he is willing to go over the cliff, the end of the year.

we are awfully close. >> remember that congress always has the ability to set a new set of tax rates. even if we went through december 31 and these rates went away and everybody's taxes increased, honestly, some more than others, we could, as a congress, go back and try to do pieces of that to try to bring some of those rates down for some people. i think that is what my republican colleagues are really the most afraid of. once you lose those tax cuts, at the end of the year, it will be hard to bring back those tax cuts. the tax cuts that would come back would be mostly for the lower and real income people. the biggest leverage that the

republicans have right now is this december 31 date. they are quickly running out of time. dagen: would you be comfortable with it. you raise tax rates on the wealthy. just not back to the clinton era level. you grow up, but not as far as they used to be. would you be comfortable with a deal that had that and it? >> again, it is how much in total rates and how much spending cuts do we make. also, some of the defense money needs to be cut at this point. we need to look and see how much is cut. certainly, all of us is worried

about a percent across the board. some cuts have to be made. revenues need to be increased. if at a higher rate on the wealthy, but not as much as that used to be under the clinton years, we have to see how much that brings. if that means getting rid of some deductions, we have to see what those are and how much revenue is on the table. dagen: representative, thank you. >> i get to go home every weekend and i love being called. orange county is a great place. i have to tell you, people.com know how serious this is. i am willing to stay here to get the job done. dagen: representative, thank you. take care.

connell: we will go back out to michigan and this union firestorm we have been covering out there. dagen: ticket vendor stubhub has a new deal. thumbs up with major league baseball. the problems. big names like the yankees opting out. that is 40% of stubhub baseball business. oil is up. ♪

♪ connell: here it is. time to make a little money with charles payne. dagen: he has clean fingernails. [ laughter ] charles: the last time i talked about this with you guys was september 27. it has pulled back. a really interesting thing going

on. the company came out with earnings. they blew away the number. they came very cautious. the stock was initially under pressure. why is this? you start to look at things they are worried about. they give hints that perhaps things will look better. i think wall street is gravitating towards those pants. like coal. it went from 43 to 33%. as natural gas prices went up, it rebounded. if that gas prices go higher, we probably will see more coal demand which will be the more demand. they will hold on to that stuff because even producers are starting to lose money at a certain point. connell: are you worried at all about a slowdown in china? charles: europe is up. japan is.

they will need natural gas and coal. global demand for this will be huge. this is one that i think people should own long-term. dagen: thank you. charles: by the way, i loved your interview with representative sanchez. dagen: thank you, charles. connell: a quarter past the hour, let's go back to the markets. nicole: we are looking at it now. they are digesting a big acquisition. as i noted, this is a top performer. it is up over 4%. let's take a look at the broader

orchid and -- let's take a look at the broader market. the last time we saw this kind of trend it was up seven days. the dow is up. back to you. dagen: at it again. north korea launching a rocket. legitimacy of the regime. we will talk about that coming up. connell: to the stage for similar seeds in different areas of the nation. first, let's take a look at world currency. ♪

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>> 21 minutes past the hour. i have gearbox is in it. a masked gunman kills two before taking his own life. the shooter fired at random. they say there is no known connection between the suspect and his victims. the nypd releasing startling

surveillance videos detailing the last moment of brandon woodard's life. the 31-year-old was gunned down on monday but an unidentified suspect. the hitman is seen walking up behind the victim and firing one fatal shot. the united states and its allies are condemning north korea's launch of a rocket. the un security council is now meeting to discuss a response. dagen, back to you. dagen: thank you very much. let's bring in the author of "the coming revolution." he is joining us from washington, d.c. how serious should we take this north korean rocket rods? >> very serious.

it means that the five members are interested. the development of these rockets is only a prelude, a projection, for more missiles towoodard. dagen: did you expect anything out of china? >> there will be narrative. there will be verbal chinese warnings. not to develop, you know the situation. they have their own narrative that think should be stable. if they do not get anything else from us, in return, that has not happened so far. dagen: relate north korea and

this latest action and problems in the middle east. north korea's relationship with iran supplying technology there and does this now take our eye off of, say, just syria? >> it should not. any rocket or missile launch in northern korea is a missile launch for by rob. they are allies. they give each other technology. yesterday the president of the united states still clear that he will be the ally, the partner of the syrian opposition. dagen: serious how? what is next? what power does this give the rubble group and where does it take it? >> president obama said that he is not going to send weapons at this point in time.

he will be calling for further economic financial and diplomatic measures here and elsewhere. we think that the new leadership of the opposition will sideline before we engage. dagen: greatest threat to us right now. pick a country, pick a group. >> it will always be iran. it is still growing. they have done benghazi. they may do more in the future, unfortunately. dagen: it was great to see you. thank you for your insight. connell: this right to work campaign in michigan. the bill getting signed into law last night.

could it be an example for other states. dagen: and stubhub. where are the yankees? here are some of today's winners on the s&p 500. ♪ [ male announcer ] this is steve.

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connell: unions take a hit with this new right to work law. we also have stubhub president,

not. the problem is, pick teams like the yankees and the cubs opting out. more revenue, or taxes, we are hearing a lot about what the president wants with a new deal. neil cavuto is coming on. he will be here before the end of the hour. dagen: time for stocks now. nicole: we will take a close look, dagen and connell, at eli lily. they had high hopes for and alzheimer's drug. it really could have brought in alternate billion-dollar annual sales. take a look. the stock is down 2.1%. they will do so more studies to get more information.

i guess they really want to beef up all of the tests and show that this drug really does work. obviously, pushing this offer is not good news for the company. back to you. dagen: thank you so much. the governor rick schneider gave the final stamp of approval. connell: the 24th state that has passed that type of legislation. mike towbin is outside the state capitol with the details. >> the sound and fury are gone from here in lansing. these are demonstrators quarter. this is symbolic of the fact they believe the voices were silent. the $1500 is what they say each worker will earn on average less. now that michigan has become a right to work state. a sharp contrast from what we

saw yesterday. this demonstration has been coordinated with the media. democratic leadership of here says that this does not mean that the fight has gone out of the left here in michigan. a spokesperson for the party says they do have a counterpunch. they are not think specifically what that counterpunch is. they want to change the majority that the republicans have it both the house and senate in 2014 when it comes around again. they really like to prove that old theory. they really have to get behind closed doors.

dagen: they will not go quietly and they certainly will not let it go that quickly. great sites there. some agreement between the white house and the republicans. both sides appear to be willing to consider taxing at least a portion of municipal bond interest take you higher income households. that could spell big trouble for debt ridden california. more on that from david crane. what would have been to california, if anyone needs to issue and sell them at low rates that it has to be california? >> good morning, dagen.

california doesn't need to issue debt. this would not hinder its ability, at the state level, at least. it would increase the cost to the state. dagen: that would make it tougher to sell, would it not? >> no. you would still have buyers. in california's system, that is very senior. there is a waterfall, if you will. they could sell more debt and they can sell lots of death. the cost would go off a bit. the burden of that cost would mean a deduction of services to low that. let's say that was an additional 1%. it is an extra $10 million of costs on every login dollars they issue. it would not hinder the ability of the state to issue debt. they can continue to issue debt

in that is one of the reasons they have that in connection with pensions and retiree health care which is a similar form of debt. those consequences just squeeze people at the lower levels. defenseless citizens get hit. dagen: i suppose, that would be offset by proposition 30 which just got passed in california. it would continue to make municipal bond debt attractive and that state. you will now have a top tax bracket of 53%. >> yes. it just means a higher cost to the state. it is not that it is deducted. it just means it is not taxable

currently. it is just like the building america bonds that are now issued by states which are taxable at the federal level. the state can issue the death. the consequences fall on innocent people. dagen: what you think, though, is the ultimate consequence of now taxing people at 53% in california? >> well, i will tell you, the big issue for people like me and paying higher taxes in california is not so much paying higher taxes, it is where the money is going. all of this will go to off balance debt. you also have a number of

accounting mechanisms that have been used to shield from the citizens. that is where the money is going. that is more annoying than just paying higher taxes. paying higher taxes when you know the benefits are going to your fellow citizens is not a problem for someone like me. having the money to just pay off past debts while not reforming the system that gave rise to those past debts is deeply annoying. i think it is a serious problem for california. some people will leave, of course. people like me love it out here. we would rather stay and fight. there will be negative consequences and we just have to fix these problems out here. dagen: david, thank you. david crane. be well. connell: we have the president of stubhub standing by. some of the big teams, yankees,

cubs, opting out. dagen: where are the spending cuts? neil cavuto will tell you and if they will ever happen in washington. take a look at the treasury market. the government can borrow at that rate. it could go lower if the federal reserve has its way. ♪

>> im lori rothman with your fox business brief. caterpillar is growing on the list of companies adding -- it remains its quarterly dividend. netflix shares jumping after morgan stanley raised its price target $25.

pickup is by rating. netflix is on track to temporarily disrupt the cable ecosystem. holiday shopping impacted by hurricane sandy. wells fargo shows shoppers spent more and small retailers then they did this time last year. total u.s. resales increased. that is the latest from the fox business network. giving you the power to prosper. ♪

connell: major-league baseball renewed its contract with stubhub. the thing is, we mentioned this a couple times. not all of the big teams in the league are on board.

the president of stubhub is joining us to talk about this. obviously, you are excited. the yankees have opted out. the cubs have opted out. these are big teams opting out. that is not great. >> well, i appreciate you bringing up the renewal of our partnership with major league baseball for another five years. we think that is fantastic. there are 30 teams in major league baseball. it would be great to have all of them, but only having three, that is understandable. we are the unofficial fan to fan ticket marketplace. 427 of the other teams. when a seller sells a ticket through stubhub it gets delivered to the buyer. we will continue to sell yankees, cubs and angels tickets on stubhub even without them opting in.

we will just deliver our tickets differently. we cover all the other professional sports. we do not have partnerships with every team. we are able to be the biggest and the best. connell: one of the things it brings up is the business model and your competition with ticketmaster or whoever. if i want to go to a yankee game here in new york and the team is playing tomorrow night, i may say to myself that i am going to wait until the last possible minute and i will get a rock-bottom price on stubhub. they rather people buy their tickets early. we do not want people to know that they can get the ticket for next to nothing at the last minute. how do you correct that problem, if it is a problem. >> we do not think that it is a problem. i think consumers will always want to get the best possible

price. >> i think that would be ideal for the team. step up is a marketplace. the tickets on sale on stub hub are actually owned by sellers. they're trying to maximize the price that they can get. the market determines the price. we do not. how well the team plays and the weather affects the price as well. the market price is the one that appears on stubhub is sometimes lower than the face value of the ticket. they can be and in other cases they are not. connell: you know, to go back to

this issue, i think it is interesting. if other teams follow that, you could lose out on a lot. you are losing all three big markets. i know you still sell the tickets, possibly, but what is the percentage? >> am not going to tell you the exact percentage. baseball is a very important part of our business. obviously, important teams within baseball. as i said, we have all the other leagues, they have unofficial partners with other people. connell: are the yankees 40% of your revenue? >> no. [talking over each other] >> baseball overall is at 40% of our revenue. no. there is not a single team that is within a few percentage points. connell: you lose out on three

major teams. >> we will sell tons of yankees, cubs and angels tickets next year. in the nfl, every team is integrated with one of our competitors. we are still the largest marketplace for nfl tickets. despite the integration that our competitor has. no one beats us. connell: got it. thank you. sorry for rushing you along. >> thank you. dagen: if the yankees played better, the tickets would not be cheap. you can find tickets out on

fifth avenue. let's bring shibani joshi in. always good to talk apple tv. shibani this is probably the most definitive idea and statement in terms of what we will get from apple as it tries to enter your living room. whether you are watching baseball or other sports or anything else it is an relaxing experience. today, the "wall street journal" is reporting that apple is in fact testing several prototypes of a television set. it is not a cable box. it is not an accessory. it is an actual cable box. the report goes on to say that this is all process development. we do not know whether or not

any of these prototypes will make it to the market. all of this testing as part of what it does. apple shares down a little bit today. this is the next big idea. connell: shibani, thank you very much. dagen: should you start changing all your christmas stockings from red to blue? we have neil cavuto coming up. where this pending that are questionable. let's take a look at some of the winners on the nasdaq. ♪ [ male announcer ] this is the age of knowing what you're made of.

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connell: is santa claus a card carrying democrat? 44% of respondents feel that santa claus leads to the left. just 28% thinks he sides with the likes of john boehner and company. only 11% would admit to being naughty. he is kind of like, you know, he is out there. connell: do not say anything negative about santa claus. somebody will be bringing coal

to the democrats and republicans in congress this year. dagen: neil cavuto is here now. the sides are still so divided. based on the talks that you had. lou: they are not talking warm and fuzzy. there was sort of like a quiet. yesterday. boehner came to the microphone to express his frustration with the process. then nancy pelosi came out and said, look, where have you been john boehner. they went back to jawboning and that is never constructive. when you are ripping each other in public, there is no way you could be doing much in private.

connell: i keep waiting for them to wake up and there be a big bargain. to the republican path of leverage to get the spending cuts. gerri: they will offer the tax hikes and they will say we offered the tax hikes. they will go on record as risking a click event. they will say we did our part. no one wins in an environment where you could potentially hurl into a recession. the sense that i got from these guys is they will probably gather something. they really have too have at least the outline of a deal by friday or this weekend. i know that sounds bizarre, but

they have three days to mark up a bill. three days to put it in conference. another three days to review. i am including the weekend days as they go forward here. they could change that. one would say, well, you know, we can change these rules and they can. it is either friday or potentially bust. it is a head scratch or to me that they do not see the market implications of getting something done. i know we do not have a lot of time. i think that what they will do is rush a bad deal that will be worse than no deal. i think the markets will punish them all the more. be careful. we remember when the markets fell almost 780 points.

congress rushed back in action to prove another deal. a few months later the dow was down an additional amount. do not hang your hat on the markets. connell: we will have to get to those stupid commercials. gerri: which commercial would be be going to work smack. connell: i do not know. lou: any of the golden commercials. i am for that. connell: it is not pretty. we have to pay the bills. [talking over each other] connell: neil cavuto will be on today at 4:00 o'clock.

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dennis: i am dennis kneale. cheryl: i am cheryl casone. time for countdown to the fed decision. we are 30 minutes away from the fed latest forecast on the economy, the employment picture and perhaps the impact of the fiscal cliff. dennis: many are banking on more and new statement from ben bernanke and company. qe forever. cheryl: full team coverage for the entire hour, nicole petallides watching traders'

reaction from the floor of the nyse, jeff flock watching action on the trading pits of the cme and we have you covered with all-star fed panel. first we begin with nicole petallides on the floor of the nyse with stocks at the top of the hour. the fed now up 6. nicole: we are up six points, we are for six day is a row for the dow jones industrial. some would say people were waiting on the fed, talk about more easing and more stimulus and traders, they were asking about extending the programs, we will see about that. as far as major market averages the dow is just above the unchanged line like the s&p 500 and the ticket in nasdaq pulling back and you see the markets are very tepid and hovering right near zero and waiting for each headline. dennis: thank you, critics are calling it q e forever. the expected in moments to announce a new stimulus.

cheryl: a current bond buying program, operation twist is scheduled to end. let's bring in our all-star panel. let's start with gerald 0 driscoll who is with the cato institute. you say we need to end the bond buying program, it needs to end right now but the feeling is it is not going to happen. wire you feeling so strongly this way? >> i have felt this way for it while. these low-interest rates distort capital allocation and investment decisions and investments depend on low interest rates which can't last forever but i agree with you it is not going to happen. dennis: let's pass steven of the american enterprise institute, a longtime former fed economist. you think this is the right stuff, more easy money. >> i do. i think the economy still needs some stimulus. the economy is not growing rapidly. inflation is low. i do think this is the right

thing to do and i do think they will announce a new treasury purchase program to take the place of twist. cheryl: jack, there's so much talk at this moment about the threshold, changing the direction, getting off of the 2015 marker for the fed and instead making it markers at a threshold base. you say that needs to happen. why? >> there are two things investors need to pay attention to. that was the q e aspect which is bond buying. everyone thinks that will continue here but then there is the forward guidance they have been talking about and based on everything we have read and looked at the fed seems destined for announcing thresholds. macro economic thresholds' that indicate what off as needed in the federal funds rate and -- cheryl: you don't think you're going to get that statement. >> i don't think -- we do get that may be in january or march.

next year. i don't think at happens today. today is a non event. i don't think that is the right path for the fed. that is the height of ivory tower madness that has taken over here. dennis: for bond market perspective i think is wrong. lee's check with jeff flock. commodities are up on anticipation of more easy money. what is happening now? jeff: commodities, i am standing in the third futures pit which in different economic times is a great predictor of what the fed is going to do but if you need any more indication what the market thinks the fed is going to do not just today but going forward take a look at this. doesn't look dead? doesn't look like nobody's doing anything? correct. no one is doing anything. oil and gold moving a little bit. bolt up a little in advance, thinking about potential stimulus, inflation fears, oil up more not so much on fed but news out of opec that they are going to leave their production

ceiling in place even though they are out producing what the ceiling is now. that has been a little bit bullish for prices in oil but nothing much coming out of the fed any time soon. they need a pizza or something. cheryl: you never know. we could get a couple surprises when it comes to the language. you never know how they will react. >> as a predictor, as a predictor they are not predicting anything. absolutely right. we will be here to go crazy when it does. cheryl: i want to bring in scott marden, united advisers chief market strategist and take this to the equities perspective, talking a lot of action at the cme today. when it comes equities you have the dow up five days, traders waiting to see what the fed will do. it is all about extending the bond buying program. if we get a number below -p$45 billion which seems to be the threshold expectation, what do you think the stock market

might do? >> probably sell off. if you are an equity market lover you have to like what the fed is doing. you have to expect the fed to keep the number high. i think the number will go higher because i think the fed is addicted to the stimulus and the bond buying they have created and diving gerald's camp. this is a very unnatural environment. it could last a long time but eventually there will be a price to pay. eventually the bar closes and the party stops. i don't know when that is. at some point next year. this is not a job creator. q e 3 does not create jobs or growth. that is something the fed chairman highlighted. is not happening with this three program. dennis: let's go to constance hunt, an economist who looks at fixed-income. what is going to happen today versus what should happen? >> they're going to announce more bond buying but you have to put this in global context.

we have the ecb which is going to lower rates in the beginning of the year and the bank of japan which will do some really serious quantitative easing. up until now they have just been dabbling. when you add this all together the fed is acting in concert with these other central banks but also you have the global economy and a moribund seat, looking at growth next year for the developed world of 1.4%. i don't think the fed had the choice even if it is not necessarily the most effective or efficient tool. cheryl: james lebenthol, you believe they're going to continue to buy mortgage-backed securities. they will make a big long-term treasury purchase that is expected but you don't agree with those decisions. >> like rest of the panel. i think the economy is showing signs of healing itself. the unemployment rate gets a lot of negative press because it is those susceptible to labor force participation. if you look at you 6 underemployment which is not susceptible to labor force participation effect you will see it have gone from a peak of

17.2% to 14.4%. shows this economy is healing itself. the fed doesn't need to add more fuel to a smoldering fire that will erupt in inflation at some point in time but like everyone else on this and we does seem like they're going to placate the markets by doing more easing. cheryl: you have the dow up five days and our seven points. the only what we here at the bottom of the hour is going to dictate what these markets do and you never know what is going to happen. our panel will be staying with us and bring all of you back in just a bit for a little bit more because we now have 23 minutes to go until the fed's latest move on the economy. charles payne, sandra smith, david asman later in the show with what they want to ask ben bernanke at the news conference in a couple hours. dennis: john boehner talking down the president's fiscal cliff plan. are the two sides closer than they're letting on? cheryl: jeff flock was already talking about the action this

morning in the oil contract. oil almost $1.86. the not move. it is said day, everyone. there is no mass-produced human.

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woman: what do you mean, homeowners insurance doesn't cover floods? [ heart rate increases ] man: a few inches of water caused all this? [ heart rate increases ] woman #2: but i don't even live near the water. what you don't know about flood insurance may shock you -- including the fact that a preferred risk policy starts as low as $129 a year. for an agent, call the number that appears on your screen. dennis: we are waiting for the fed like wall street is, the dow seven points. maybe 20 minutes or less away from that decision and reaction

from the all-star panel. cheryl: some other things happening in news today. a new poll showing a majority of americans disapprove of how house speaker john boehner is handling the fiscal cliff talks. dennis: this as the speaker himself came out this morning saying there's a lot of work to do. rich edson is in washington d.c. bureau. what is the very latest? rich: in a republican congressman with knowledge of the talks as the two side are farther apart than they were last summer when debt talks between president obama and john boehner fell apart. republicans and democrats have new debt proposals on the table. the speaker says there are still serious differences. >> the president is calling for $1.4 trillion -- that cannot pass the house or the senate. >> force is a question of balance. we are willing to make sure everyone in america sacrifices a little. even those who have been struggling.

liz: congress is running out of time to get this wrapped for christmas. the speaker would have to cover significant ground giving congress the week it needs to write, sell land pass any deal next week. aides say they are not close to a compromise. house majority leader eric cantor says republicans are prepared to work on this on the way up to the new year. cheryl: so much for christmas eve in eric cantor's household. thank you very much. much of the dismay of unions, michigan governor rick snyder has given the final stamp of approval and signed right to work legislation in that state. is making mich. the 24 right to work state. on the heels of the other states expect to follow suit. legislators and unions from the state like new york and new jersey to push for this. dennis: state economies will grow better. on fed watch, maybe 16 minutes. before ben bernanke and company give the latest on the economy. keep it here for the best coverage on fox business. cheryl: this is the place to be.

our of our panel will come back and talk about who should replace fed chairman ben bernanke, hearing he wants to go, who should be in line? dennis: like attending his own funeral. how world currencies are faring against the u.s. dollar.

cheryl: we are moments away from the fed's decision, the final scheduled meeting of the year. we are now seven minutes away. we will get that announcement. maybe analysts believe today's announcement will include a new stimulus program, operation twist scheduled to end and get something new from them. if we get the new bond buying program that could push the market higher or if it is not the amount of bond buying that the markets want markets could have a negative reaction. we are on that for you. dennis: you wonder if this is more fun and markets than the economy. as we wait for the fed decision let's bring back our panel. ben bernanke has signalled this is his last term at the fed. an ends january of 2014. let's start with gerald drizzle, a former dallas fed vice president. you said bernie pgi it is ben bernanke to create to fix the mess he created. please elaborate.

>> what i meant by that is he blue and the balance sheet of the fed and it will have to be shrunk and that is not going to go well. i don't think he wants to hang around for that. dennis: who should replace him? >> who were should replace him i don't know. i would have to say janet yellen would right now be the front runner but it is always dangerous to be the front runner for a job like this. cheryl: constance, you work with the fed chairman and different boards and you believe janet yellen is the one that is bandied about but you are not convinced she is the correct -- choice for the job. >> i like genital what. she is competent but as a strictly academic background as many of the fed staff do. i think it could be interesting to bring someone in from the outside, someone like glenn harvard, hard to entice away from new york but could be an interesting choice. he was affiliated with mitt romney's campaign, a stretch

across the aisle for obama but ben bernanke was the choice for george bush and this could be an area where obama can reach out and do the bipartisan thing. dennis: i am hearing that janet yellen is easier with money than ben bernanke. would markets like that janet yellen appointment? >> they would benny's your question to answer then who's going to be the next fed is who should not be the next fed. as mr. driscoll pointed out there is a heck of a job ahead of the new fed presidents and you cannot have somebody like warren summers coming will be bombastic and captain ahab steering the ship wherever it may go. you need consensus and steam working cleaning up the so-called mess. cheryl: i want to bring scott martin into this. one of the things you said on the show several times about dollar destruction, and do blame the fed policies for destruction, fair enough. is there someone in your mind who could replace him and may be

strengthened the u.s. dollar and strengthen the economy? >> it will be tougher. to gerald's point, we heard it destroyed the dollar. everyone calls this quantitative easing. it is quantitative sneezing. they made the dollar sick over the last couple years with printing. it is natural economics. you make more of something the price of its goes down. the reality is we are already there. another name my would throw out is robert schiller of yale university, great track record on psychology investor and housing market which is still a major problems so we still have problems, banks around the country, he is one we should watch out for. dennis: let's ask a 25 year veteran staffer at the fed. should the fed over insider elected janet yellen or might there be an outside benefit with going with an outsider with a fresh pair of eyes? >> janet is the obvious choice and my money is on janet to get the job. she has all the requisite

experience, she has policy experience outside the fed as well. she is chair of the council of economic advisers, very thoughtful. i know some people on the panel don't agree with her policy choices but you read any of his speeches she is very thoughtful and very well versed in issues the fed is dealing with and going forward, that will be a very important point. an outsider would not be as well qualified to do that. cheryl: we are getting very close to the fed decision. we want to take a quick commercial break. our panel will be sticking around with us but do not move. more with our panel and the fed decision coming up in moments. dennis: we have charles payne, sandra smith, david asman joining us later with what they would ask the fed chief ben bernanke at his news conference. cheryl: as we go to break we will look at the market and look at the s&p, the winners and losers and stocks we are watching, watching the markets. we will be right back. [ roasting firewood ]

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dennis: the fed decision is imminent and peter barnes will have the first word on the decision. cheryl: let's take it to the all-star panel as we wait and get final thoughts and before we get a big decision i want to take this to you, the language in the statement could be interesting. they may talk about the threshold but if they do not, if they do not, is that market negative? >> it depends. they haven't seen enough information in the interim period since last needing to change their economic outlook so that part of the statement won't change much. the next thing people look forward to is what you going to

do about it? and the language is important because it will be the size of bond purchase programs. everything i have read somewhere between $20 billion and $40 billion in long-term treasury security purchases is expected, something bigger or smaller than that could grab the market's attention. the last thing i am looking for is the calendar date change, that is something they do drop. janet yellen has been chairing the subcommittee on fed communications making that push. that is the direction they are heading in. dennis: let's go to scott marden. we keep doing more easing and it keeps not working. is this more about helping the stock market than the economy? >> yes. hours that for a fast answer? that is all it is. it is equities. if you like equities you like this fed because they're printing money like it is going out of style so i keep buying stocks until ben bernanke is out of the chair. cheryl: reminding myself of the

language on october 24th. one of the things they did, the first paragraph of the statement was the unemployment rate is elevated. i wonder if that language changed and they talked about higher energy prices. that is not a factor in a statement we expect to get today. any language changes you are expecting? >> i am not expecting any language changes. the elevated unemployment rate will remain in there and whoever spend enough time in six weeks for them to fundamentally change their forecasts. cheryl: okay. constance, what do you think? will there be a true language change? if we look at -- you know ben bernanke. this is it. the last scheduled meeting unless there is an emergency. what do you say? >> there are a couple things to watch here. this is all about getting housing going again. this is why they are buying mortgage bonds. they talked about it in several

statements. the economy -- you are starting to see a cat that housing recovery. we are going into the slow season, winter is usually the slow season for housing. if they do more than expected will be in mortgage bonds. dennis: which would you rather have the fed buy more of? mortgage-backed securities for u.s. treasurys? >> for much there same reason constance said, mortgage-backed securities. treasury rates are low and housing is where you get the multiplier effect in this economy. if you get more housing sales whether it is new or existing homes you will see more transportation of raw materials. >> the fed watches a new round of bond buying. a new bond buying program, a new round of quantitative easing as expected. $45 billion a month in treasury security and for the first time it set new benchmarks for when it will start tightening monetary policy, not before

unemployment can 6.5%. here is why, quote, information received the federal open market committee met in october suggests economic activity and employment have continued to expand at a moderate pace in recent months apart from weather-related destruction. the unemployment rate has declined since the summer but remains elevated. household spending has continued to advance and a housing sector has shown further signs of improvement but growth in business, fixed investment has slowed. inflation has been running below the committee logger term objective apart from temporary variations of fluctuations in energy prices. long-term inflation expectations have remained stable. the committee remains concerns without efficient policy accommodations, economic growth might not be strong enough to generate sustained improvement and webber market conditions. furthermore strains in global financial markets post significant downside risks to the economic outlook.

the committee anticipate inflation over the medium term likely will run at or below 2% objective. this supports a strong economic recovery and to help ensure inflation over time at a rate that is most consistent with a dual mandate the committee will continue to purchase additional mortgage-backed securities at a pace of $40 billion a month. the committee will also purchase longer-term treasury securities after its program to extend average securities of treasury holdings, operations twist, is completed at the end of the year initially at a pace of $45 billion per month. taken together these should maintain downward pressure on longer-term interest rates, support mortgage markets to make broader financial conditions more accommodative. the committee will also closely monitor incoming information on economic and finance development in the coming month if the outlook for the labor market does not improve substantially. the committee will continue its purchase of treasury and agency mortgage-backed securities and employ other policies in the

program until such improvement is achieved in the context of price stability. the support of continued progress with maximum employment and price stability the committee expects a highly accommodative stamp of monetary policy will remain appropriate for a considerable time after the asset purchase program and economic recovery strengthens. in particular the committee decided to keep the target range for the federal fund rate at 0% to 1/4% and currently anticipates exceptionally low range is going to be appropriate at least as long as the unemployment rate remained above 6.5% inflation between 1 and two years ahead as projected to be no more than 1/2% above the committee, longer run rule and long term inflation expectation continues to be well anchored. the committee used these thresholds as consistent with the earlier guidance in determining how long to maintain highly accommodative stance of

monetary policy the committee will also consider other information including additional measures of labor market conditions, indicators of inflation pressure and inflation expectations and reading on financial developments. when the committee decides to begin to remove policy accommodation it will take a balanced approach consistent with longer run goals of maximum employment and inflation of 2%. the vote to adopt these new policies 11-1 with jeffrey matter once again, president of the richmond fed opposing the new policies. dennis: good job, peter barnes. let's get market reaction from nicole petallides at bent nyse. the dow is up 20, suddenly plummeted back down. nicole: we see volatile move and the dow started jumping up 30 points and the price is over 42 points. starting to get bits and pieces from the fed and we see it will back, the 10 year treasury jumping out, 1.68%.

traders looking at getting a lot of what they expected but also to hear more about when they might do some tightening and also unemployment remains elevated. why are they doing this? this is a double-edged sword. if they did nothing that would be bad because you don't get all the free printed money and if they do something it is basically saying in their words, not mine, economic growth is not strong enough. its own. that shows you we are still in a really tough spot. that is putting it out there to the world. the economy still stinks. cheryl: i want to go to jeff flock now. the dollar beginning to erase that fed announcement drop that it took. jeff: i am standing here talking to traders. this just makes some people crazy. talking about the action to support the mortgage party.

you think rates have to increase. >> ultimately, that will be the case. we really have not seen any change. the way to get them off the sidelines, raise the rates. jeff: any reaction you are seeing down here at all? >> no. i think the market is getting what it expected. jeff: i appreciate it. we interrupted him right in the middle. muted on the floor in terms of commodities and futures here. dennis: the dow now of 27. i heard one specific that i had not heard before. we will start throttling back when unemployment hits 6.5%. is that good or bad? >> they have been edging towards this for quite some time.

it creates all sorts of expectations that ultimately cannot be met. dennis: why is it terrible, though? >> they are targeting something they cannot control. they tend over the long haul control inflation, but they cannot control the unemployment rate. the other thing, 2%, which used to be the ceiling, has now become the floor. you take that and the targeting of the unemployment rate and they are saying exactly what marvin king worried about. cheryl: jeff, i want to bring you into this. one of the things on the 6.5% threshold, that was something we did not expect to get today. what about people leaving the workforce. if the fed does not factor that in, how will we get a true

reading of what unemployment is. they have just taken one problem and replaced it with another. can that move clicks back we have seen that move several times. what is the labor force participation rate. will you still use that. it has a new set of questions. this is not the solution. they will buy more bonds in ~ unemployment rate falls. i cannot figure out the connection. they cannot move that needle.

i thought it was an optimistic thing, what do you think? >> is has been out there for a while. there are a couple things. 6.5% is interesting. the natural rate of unemployment has fallen. while they have not said it explicitly, i wonder if that means the rate has gone up. dennis: i saw that two months ago. if we are targeting, if you are targeting housing, this is when you get the highest multiplier. this is where you do actually have some feedback into better unemployment. we have an oil and gas thing

happening. it has multiplier of fax. we could be looking at the end of 2013, beginning of 2014. that is what all the other commentators wanted. cheryl: that is a really good point. 2015, from everything we are seeing in the economy right now, 2015 will probably be too far off. >> i do not think so. i think all they have done is convert the calendar date threshold into an unemployment rate threshold. their forecast of where it would be in 2015 was that it would be in about the range of 6.5%.

i do not think that this changes the bill at the fed at when they will start tightening. they have simply changed the language of what they will be looking at. the fed cannot really control on employment at all. >> i like what mr. driscoll says. i am not sure i like that argument. the only thing the fed controls is interest rates. i want to go back to what the other commentator mentioned. 6.5% will probably be reached well before 2015. if you go back six weeks ago when charles evans was the guy whose name was attached to this, 7% was to shrug shoulders that was being discussed. i think this is a fed sort of backdoor way out of this mess that it created instead of sticking with 2013.

>> i agree that they are converting into what they are really looking at which is the unemployment rate. the last forecast said about 2015. we are forecasting what they said in their mind. i think they are now actually being honest about what they are targeting. now at least, it is out in the open. >> bank of japan is printing money like it is going out of style. the track record is lousy. thank you. cheryl: thank you to everybody. we appreciate your time and

reaction. thank you to all of you. we will have what i will be asking the fed chief today at the news conference. dennis: first, take a look at today's winners on the nasdaq. ♪ i always wait until the last minute. can i still ship a gift in time r christmas? yeah, sure you can. great. where's your gift? uh... whew. [ male announcer ] break from the holiday stress. ship fedex express by december 22nd for christmas delivery.

cheryl: welcome back. we did get the fed decision. they did announce operation twist which was scheduled to

end. they have now announced a new bond buying program. market reaction very interesting right now. also, we are at 55 points. the unemployment rate, they gave out that threshold at 6.5%. dennis: we have senator smith, charles payne and hour after the bell host, david asman with us. sandra: i just called it. art noland is the guy to talk to their. what does he think the unintended consequences of low interest rates are quick select it is encouraging gambling in the housing market. obviously, you have your home

values worth less. your stock values are worth left. charles: i think that bernanke would say the exact opposite. first of all, he wants your home value to a play. he wants your stock market to inflate. he wants people to gamble and he wants people to buy houses. the cycle that we go out and spend. spending crewmates demand for jobs. >> i would ask him when his mandate changed from the unemployment to boosting the stock market. you cannot do both. we saw last week when citigroup

announced it was cutting in place. their stock went up. sometimes you can increase the value of your stock by firing people. the mandate is to keep unemployment down. not to keep the stock market up. cheryl: he has addressed that. he has not. you cannot be in favor of boosting the stock market when sometimes the stock market gets a boost by firing people. [talking over each other] >> absolutely. that helps the stock market. that does not help the employment numbers. city fired 11,000 people and its stock went up.

sometimes stocks go up in a result of firing people. [talking over each other] charles: i think this thing is sort of an outlier. it all gets back to the virtuous cycle. more people are spending money because they feel wealthier. when people start to feel better, we see that consumer sentiment numbers moving higher. when they feel better if they spend more money. sometimes money that they do not have. i think that it is one of the things that he knows. it is the number one asset in

america. [talking over each other] charles: if people feel better and they start to spend money look at how much credit card debt has come down. he wants people to invest. does anyone really think that if interest rates are one tick lower we would get a surge harks back. [talking over each other] >> the big thing is they are going whole hog on buying treasuries. operation twist was exchanging

one form of bond for another. they have run out of short-term treasuries. this is pure execution of the debt. the giant suction sound you are hearing. >> we have seen a stock market that has been somewhat artificially propped up by this week u.s. dollar. are people going to want to own stocks with this very weak dollar. it has not been fundamentally changing the economic environment in this country. dennis: the idea that stocks are now in a stock bubble when we

are still not at the october 7 levels. the earnings multiple -- for 20 years it was at about 20. this is not a stock market bubble. >> he is not doing this to help the stock market bubble. [talking over each other] nobody knows bernanke better than john does. i do not think there is a stock market bubble. i think the stock market should be higher based on the growth of the world economy. the world is absolutely on fire. charles: if you look at some of these old theories it may actually go higher to compensate for that. for me, how alarmed is he that

we may get to the 6.5 unemployment rate at the expense of 1,112,000,000 people dropping out of the stock market. dennis: 63.6% participation rate. if i don't participate i no longer count as employed. when there is a weak dollar the thing that rise are stocks and real estate. it is still overall gaming. cheryl: real quick -- [ laughter ] we only have a few seconds left. do we finished the year higher based on what we heard from the fed today.

>> did you hear could be completely different. >> look at this near-term. we have the stock market bouncing as a result. of course, they like it. >> 4:00 p.m. he has some things to say. charles: the market loves the fed. it is not even about the fed. wall street loves that bernanke because they are filling his pockets. [ laughter ] cheryl: stocks are at session highs. survived the dow is up 66. to not go anywhere. lori and melissa are coming up. ♪

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dennis: detail is up over 13,300. a level we have not seen in a while. cheryl: a couple big thing coming up this hour. you have that $45. lori rothman will be all over that. have fun. lori: that is exciting stuff. we are getting somewhere at least. will it get into the political fray about the fiscal cliff. good afternoon everybody. melissa: the panel reserve announcing another stimulus.